GDV criticises EIOPA proposals on proportionality framework
The proposals of the European Insurance and Occupational Pensions Authority (EIOPA) are overly bureaucratic and do not take into account the diversity of European markets, warns GDV Chief Executive Officer Jörg Asmussen.
View of the Westhafen district in Frankfurt am Main. The Westhafen Tower is the headquarters of the European Insurance and Occupational Pensions Authority (EIOPA).
The German Insurance Association (GDV) criticises the current proposals of the European Insurance and Occupational Pensions Authority (EIOPA) for the implementation of proportionality rules within the framework of Solvency II. “The proposals are overly bureaucratic and do not take into account the diversity of European markets,” warns Jörg Asmussen, Chief Executive Officer of the German Insurance Association (GDV).
Despite some positive changes compared to the consultation draft, insurers are dissatisfied, also in light of the announced Omnibus Simplification Package and the numerous commitments by the Commission on reducing bureaucracy and simplifying legislation. “The complex conditions for relatively small and less complex insurance companies would significantly increase administrative burdens and contradict the goal of cutting red tape,” Asmussen said.
Focus on quantitative criteria
The GDV also calls for the focus to be placed solely on quantitative aspects when defining criteria for the authorisation of proportional relief by the national supervisory authorities. “The qualitative criteria are not fit for purpose,” Asmussen said. “A total of four general and 13 specific criteria are too complex. The current approach of allowing proportionate relief based on a company's risk profile has worked well and should be retained.”
Size criteria lead to different application across EU Member States
In addition to qualitative criteria, EIOPA also proposes fixed thresholds for the approval of proportionality measures: €12 billion in technical provisions in the life insurance sector and € 2 billion in gross premiums in the non-life sector. However, these criteria do not take into account the structural differences across Europe. In smaller countries, almost all insurers would remain below these limits and benefit from relief. In Germany, on the other hand, there are very few companies to which the relief would apply.
The GDV therefore recommends introducing an additional relative threshold. This should limit the approval of relief measures to a maximum of 20 percent of the respective national market.
In the next step, the Commission will decide on the implementation of the technical regulation on the basis of EIOPA's proposals.
